This is a sometimes 'cheesey' blog about British and American politics and anything else which tickles my fancy!

Saturday, 7 June 2008

Is Obama the Google candidate?

David Axelrod, Obama's Campaign Manager
What's he learnt from Google?

I have done some more thinking about why Obama was able to defeat Clinton and I came across this insightful article published by Harvard Business on its blog. It's so good I have copied it below for you to read. You can click the link to follow comments.

The article compares Obama's insurgency to Google's methods of business. Two things leap out which make it a good analogy:

Firstly, the Obama team did not try to centralise all its resources in a single, top-down centre. It shared them, in this case voting lists, with thousands of grassroots activists (the periphery not the core.) Empowered with responsibility and autonomy, these activists became advocates for Obama's campaign - putting in all the hard work, getting out the vote and successfully out-organising the Clinton juggernaut.

Google does the same. It leverages out resources to the edge of the company, instead of hording them at the centre, which allows it to maintain its dynamic edge and take on rival competitors.

Secondly, Obama crafted a message that engaged people via different media formats. On his website. On YouTube. On the printed page. Via Email. It made people feel included in his campaign, rather than talked 'at' which Clinton did.

Google's use of search engines and the way it distributes information to consumers make the brand stronger and a better communicator than rivals because it is able to engage with people on a direct level.

The article goes into depth about how competition in business is increasingly asymmetrical and this tends to favour the smaller side. But I think what the author is getting at makes sense. Models of business are changing. Firms like Google which have a different organisational and business structure from others seem to be the model of the future. Political parties could do with learning these lessons too. Obama's team has already grasped and implemented these changes. I think in November it will make him President.

But the Labour Party, here at home, could also do with learning some of those new lessons to age old problems - how to organise, how to activate supporters and how to craft a message. It may well remain important to have a strong centre, but perhaps the days of a top-down Millibank core are over. If Labour can learn from the Obama campaign and craft a new DNA for itself it may well stave off defeat at the next election.

Now read this article and comment away:

Obama and the Rise of Asymmetrical Competition
Posted by Umair Haque

The most interesting contest of the last few months hasn't unfolded in the corporate world, but in the political one. So how did Barack Obama pull off such a radical upset, anyways?

Over the past few weeks, many of you have pointed out that the Obama campaign is a great example of many of the principles and concepts we’ve been discussing – he’s kind of the Google of politics.

So let's discuss how he clinched the Democratic nomination - from a strategic, not a political, point of view. Put aside your own personal politics for a moment – and I’ll put mine aside, too (or let's at least try to :) .

What’s immediately obvious is that Obama didn’t spend decades building the resources to power a campaign which could defeat Hillary: he was able to do so in a matter of months.
Here’s a parallel. Yesterday, it took Coke decades – and billions invested in advertising – to build the world’s most powerful brand.
As we’ve discussed, today, the most powerful brand in the world is Google. And Google built it in less than decade – with almost nothing spent on advertising.

Both outcomes are remarkable - and remarkably similar. Why?

Yesterday, the majority of competition was symmetrical: between players with relatively evenly matched resources and capabilities. Think Ford vs GM, P&G vs Unilever, or K-Mart vs Sears: the long march of the oligopolists.

That’s reflected in industrial era assumptions about competition that are still with us – King Kong sized competitors are who boardrooms should worry about most; pint-sized ones aren’t much of a threat.


Wrong. Today, its time for boardrooms to consider a troubling proposition. Competition is increasingly asymmetrical: pint-sized revolutionaries are able to pop seemingly out of nowhere and topple yesterday’s giants – fast.

Players playing by radically new rules are rewriting the rules of strategy. And I think the Obama campaign is one of the best examples of the rise of asymmetrical competition.
Yes, startups have always challenged incumbents. So what makes asymmetrical competition different? First, rarely before new and lateral entrants been able to upset incumbents so decisively – to actually put them out of commission. Second, rarely have they been able to dominate entire industries with such speed. Third, almost never before have so many revolutionaries threatened so many incumbents across a broad sweep of industries. Fourth, in asymmetrical contests, yesterday’s sources of advantage become today’s sources of disadvantage.

Let’s discuss just two aspects of asymmetrical competition that challenge orthodox approaches to strategy: how resources are built, and how important DNA is.
Obama’s campaign didn’t have any of the resources Hillary’s did, to begin with – not cash, not experience, not a brand, not relationships, not Bill. Yet, he was able to accumulate these resources at light-speed.

How? By learning to leverage resources at the edges of the firm, instead of at it's core.
Orthodox strategy teaches firms to hoard and hide resources at the core. But consider how precisely and deeply the Obama campaign
inverted this lesson:

" state after state, the campaign turned over its voter lists — normally a closely guarded crown jewel — to volunteers, who used their own laptops and the unlimited night and weekend minutes of their cell-phone plans to contact every name and populate a political organization from the ground up."

That's a textbook lesson in edge leverage: often, in a hyperconnected world, instead of hoarding a critical resource, more value can be created by sharing it at the edges.
Think about that for a second. How far outside the boundaries of possibility is that logic for most boardrooms? That's the gap between orthodoxy and economic reality.

Or take cash. Where Hillary tapped macro-donations from the establishment, Obama tapped micro-donations from anyone – an effect that was small at first, but grew like a snowball hurtling down the Matterhorn.

Sound familiar? It should – think Wikipedia vs traditional encyclopedias.

Or take marketing. Where Hillary’s strategists focused on the tired, industrial-era strategy of segmenting consumers to divide-and-conquer, Obama focused on crafting a message and a brand that cut across artificial divisions in market space.

Sound familiar? It should – think Google’s deliberate refusal to sell out, by making, for example, Google Kidz, or Google for Evil Marketers.Or take distribution. Where Hillary focused on building relationships by pushing soundbites to people, Obama focused on letting people pull a richer set of information: his campaign engaged communities both on and off-line, and made a point of making speeches and info available via sites like YouTube, where you could watch them to your heart’s content.Sound familiar? It should – think of how Myspace is reorganzing music from an industry where “product” is pushed at people, to one where, well, music actually counts again.

Now, I haven't been able to follow the race as closely as I would have liked, because I've been finishing my book (yes, finally :). So I'm sure the above isn't the whole story at all - feel free to add or subtract from these examples.

The larger point is that shifting from core to edge is how the Obama campaign reversed tremendous resource asymmetries. But why wasn’t Hillary able to capitalize on her existing resource advantages? The difference is in the DNA. Sometimes, at least, it seems the Obama campaign might just be organized and managed according to a different set of principles than orthodox political campaigns.

Consider, for example, Obama’s ongoing refusal to attack Hillary negatively – a clear violation of orthodox political and corporate strategy’s playbook, where bloodsport is the name of the game.

So why won’t he do it? It’s a stark demonstration of a principle we’ve discussed: in an edgy world, what goes around comes around. If Obama attacks Hillary today, the costs of allying with her supporters go up tomorrow.

Who else do we know that applies that principle? Google, of course, who strives to do no evil, as we’ve discussed.

Both Google and Obama have their flaws. Google, for example, doesn't always do no evil. But contrast their DNA with industrial era DNA – where it’s ripping the other guy’s head off that counts.

Where was the latest example? In finance, of course – where the would-be masters of the universe thought, amazingly enough, that they could get away with selling each other lemons…forever. Think of how much better off they would have been if bankers had obeyed edge principles – instead of thinking with their bonuses.

In other words, it’s new DNA that drives asymmetrical competition – when we organize and manage in new ways, we are able to tap new sources of advantage. Because the Obama campaign was organized differently, for example, it was able to overcome, and then actually turn the tables on, massive resource asymmetries, by shifting from core to edge.
So where do we see asymmetrical competition happening in the corporate world? The real question is – where don’t we see it happening. Here’s a short list of asymmetrical competitors: Tata, Embraer, Ryanair, American Apparel, Whole Foods, Cipla – and, of course, players like

Google, Apple Craigslist, Wikipedia, and Threadless.

Not all of those players leverage the edge to the massive extent the Obama campaign has. But what they all have in common is that they’re organized and managed very differently than the industrial-era firm: they’ve all got radically different DNA. That brings us, full circle, to another principle: advantage is in the DNA.

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